Are Electric Tankless Hot Water Heaters Efficient?

are electric tankless hot water heaters efficient

Electric tankless water heaters are quite expensive. That initial cost might seem inefficient, but in the long run you’ve got yourself quite a deal. On average, an electric tankless water heater can cost around $1,000. If we add rewiring of your house, you could easily end up with $6,000 investment. However, these heaters are (on average) 8%-14% more energy efficient than the regular heaters. With around 90 gallons per day, we can easily conclude that electric tankless hot water heaters are quite an efficient solution for your and your family’s needs.

So, once you’re done with your installation, you will be enjoying endless hot water, lower bills, and additional storage space- these are some of the main reasons for switching to a tankless water heater.

In order to understand the efficiency in the first place, we need to understand how these electric tankless water heaters work, what major investments are there to make, and what this efficiency actually means.

Simply put, electric tankless water heaters are quite a valuable solution, but how long should it pass until you feel the difference? Let’s see!

How much money can I save with a tankless water heater?

When it comes to efficiency, the best inductor of how efficient a water heater is, besides personal satisfaction of never-ending hot water, are the bills.

Therefore, electric tankless water heaters spend much less energy than the regular ones. There are no additional costs of keeping the water in the tank hot, as it is with the standard water heaters. You simply turn on the faucet, and there you have it – instant results.

With that said, and with the research done by the U.S. Department of energy, we may conclude that the bills are quite lower when it comes to electricity, and all that thanks to the electric water heaters. On average, these little heaters can save up to $44 per year.

Sure, this looks quite small if we compare it to the investment of the installation process, but think about it in the long run.

In less than 10 years, this could easily pay off. You shouldn’t worry about their longevity – they can last up to 30 years. On the other hand, if we take, for example, regular water heaters, their lifetime is rather shorter. Consider the costs of installing and buying a new one after 10 years (on average), as they can last only up to 12 years.

Besides, think about the other pros of using an electric tankless water heater. When we sum it all up, it’s highly efficient to get an electric water heater as soon as possible.

How much are electric water heaters efficient?

What is the so-called energy factor (efficiency) in tankless water heaters? It’s an indicator of the overall energy efficiency based on the amount of hot water produced per unit of fuel consumed over a day.

There are three things that affect this efficiency:

  1. Recovery efficiency – It is a relation of how effectively the source of heat transfers on the water.
  2. Standby efficiency – There is no standby efficiency when it comes to tankless electric water heaters. It’s only related to the regular water heaters, and it’s the percentage of energy loss needed to keep the heated water actually
  3. Cycling losses – This shows the loss of heat as the water circulates through a water heater tank, and/or inlet and outlet pipes.

The higher the energy factor (EF) is, the better the efficiency you get. Bear in mind that the higher energy factor values won’t always mean lower operating costs.

There is always some kind of information (from the manufacturer) of the certain model’s energy factor. You should be able to notice this from the product literature. This factor is highly important to notice if you wish to calculate the annual costs precisely.

With the simple equation, you will be able to calculate it and see the efficiency behind electric tankless water heaters for yourself.

Let’s get to some math!

365 days per year x (times) 12.03 kWh a day ÷ EF x Fuel Cost (in this case electricity cost, kWh) = sum of costs

Here’s what you’ll find in the manufacturer’s manual: kWh per day and EF. You should be able to find out what the average consumption is, and how big is the energy factor of a certain heater.

If we take the EF of 2.0 and the costs of electricity consumption of $0.0842/kWh as an example, we will get this equation:

365 X 12.03 ÷ 2.0 X $0.0842 = $185

So, this is basically your annual cost of having an electric tankless water heater that works on 2.0 EF.

There are two main types – gas powered tankless water heaters and electric tankless water heaters. When it comes to their efficiency, electric tankless water heaters are the winners with 99 % efficiency.

If your family is using less than 41 gallons per day, these electric tankless water heaters can be as much as 34% more efficient than the regular tank water heaters.

For homes that use as much as 86 gallons per day, electric tankless water heaters can be 8% -14% more energy efficient.

This number can even increase. As we mentioned, installing it only for your bathroom will give some minor efficiency when it comes to electric bills.

However, if you install them at each hot water outlet, you could potentially save 27%-50% of energy!

Flow rate

So, we all know that tankless electric water heaters heat water on its way through. But how do they actually manage that? When we turn our faucet on cold water travels through the pipes into the unit.

With tankless water heaters, either gas or electric element heats up the water on its way. As a result, we have “on demand” hot water for a whole day.

Well, that is not quite true. Even though you don’t need to wait for a tank to fill out with hot water, there is something else that you should consider- heater’s output which limits the flow rate.

On average, electric water heaters can produce 2 – 5 gallons of hot water per minute. It all depends on the electric type heater- some may produce up to 8 gallons.

Why is this important? Well, the flow rate is the only limitation of an electric tankless water heater and directly affects their efficiency. For example, if you are having the one that can provide 2 gallons of hot water per minute, running two showers won’t simply work.

You would lack hot water. Let’s say, running a shower and the dishwasher at the same time could reach your tankless electric water heater’s limit, which could be highly unpleasant.

Of course, the solution is quite a simple one. Install several tankless water heaters. But then, the costs of installation are doubled or tripled.

Overall, if we take into consideration all these factors and how they affect the efficiency, we can easily conclude that you should think about the size and needs of your family. You can easily install electric tankless water heaters that can provide up to 8 gallons of hot water at the time.

With 8 gallons, you could easily run two showers and one large appliance like a dishwasher at the same time.

Final Word

Electric tankless water heaters seem to be quite a valuable water heating systems. They are, on average, up to 20 % more efficient than the regular electric water heaters.

With much less energy to be wasted on re-heating and on a standby efficiency, electric tankless water heaters are such a great deal in the modern era of technology and energy-saving.

Hopefully, this article helped you realize how efficient electric tankless water heaters actually are and the decision whether to get one for your home will come much easier.


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